Expansion of agribusiness and the railroad
Encompassing several production sectors, such as agriculture and livestock, agribusiness is one of the country's main economic activities and continues to grow. In 2019, agribusiness GDP rose by 3.8%, reaching the 20% mark of Brazilian GDP. In 2020, the expansion of agribusiness was even greater, about 6.5% until the month of October. Of this number, 68% correspond to agriculture and the other 32% correspond to livestock.
In reais, the amounts are quite expressive. About 1.06 trillion reais is the amount corresponding to agriculture, and R $ 494.8 billion corresponds to livestock, numbers stipulated at the end of 2019.
The export of products outside Brazil is the main growth model for the national economy and the expansion of agribusiness makes this activity the largest exporter in the country.
With soybeans as the main exported product, Brazil reached around R $ 26 billion in exports of this input in 2019, with around 70% of this total being sent to China, the country's major economic partner.
Even with problems related to the Covid-19 pandemic, which directly affect the economy of Brazil, agribusiness is one of the few activities that has strongly resisted in recent months, in which the country faced quarantine and a great drop in jobs and population consumption.
According to the researcher at the Center for Advanced Studies in Applied Economics (CEPEA), Nicole Rennó, the GDP growth of agribusiness in 2020, even with the problems that affect the country, can be explained by several reasons.
Since sustaining supply and demand, an excellent agricultural harvest in this period and even receiving emergency assistance from the population, allowing people to continue to buy products from agribusiness, these are reasons that can explain the maintenance of the expansion of agribusiness in Brazil.
In a survey carried out by the Ministry of Agriculture in July 2020, it pointed out that the sector exported around 50% of all products exported in the month, equivalent to R $ 10 billion, in the month.
Content Index
Expansão do agronegócio e Logística de transporte
The numbers related to agribusiness continue to improve more and more, but researchers in the area point out that they could be even greater, if Brazil had a transport logistics that met all the demands of the sector, mainly the railroad modal.
In recent years, the numbers of cargo transported in the main transport models, road and rail, have remained unbalanced. Highways represent around 61% of all cargo handled, while railroads only slightly more than 20%.
This is a number that represents well the difficulty of expanding agribusiness, and we will explain why.
With the road sector being the main transport model in the country and even agribusiness, the logistical costs are quite high, due to some main factors, such as the price of freight, the speed of travel, the size of the cargo per vehicle transported and the time of the travel delay.
The freight price of highways is considerably higher than that of railroads. According to the board of the National Association of Railroad Transporters (ANTF), rail freight is equivalent to 50% of the road.
Another determining factor that hinders the flow of cargo from agribusiness, and consequently hinders the expansion of agribusiness, are the long distances from some producing regions to national ports.
The Midwest region, for example, which has been participating in the expansion of agribusiness, could be better positioned in the rankings of exporters of agro products, but due to the great distances to the main ports in the country, such as the Port of Santos, tied to excessive costs of road transport, this growth is hampered.
How to improve the situation?
A resposta dessa pergunta está totalmente ligada com o crescimento e o balanceamento dos principais modais de transporte do Brasil.
This imbalance is one of the major factors that hinder the flow of agribusiness products to the main regions of the country and also for export, since the logistics costs of the highways are considerably higher than that of the railroads, making it difficult for agribusiness to expand.
In this way, the solution presented by experts, frequently debated in government meetings, is that the expansion of agribusiness involves the growth of the railroad transport sector.
Currently, Brazil has about 29 thousand km of railroad lines, which would be an acceptable value for the current moment in the country. The problem is that, thanks to the policies implemented in the last decades, which prioritized the road sector, a good percentage of this extension was scrapped.
The estimate is that only 10,000 km are in total conditions for the flow of products, not only those related to agribusiness, but also steel, mineral and oil inputs.
According to a study by the Institute of Engineering in 2020, this was the main conclusion that researchers found to advance the expansion of agribusiness, for some important reasons.
Among the main notes of the study, the long distance from the states located higher than the ports in the southeastern region and the difference between the number of loads loaded between a train and a truck are the most relevant reasons for the road modal not being the most suitable for the expansion of agribusiness.
To give you an idea, the distance between Cuiabá, capital of Mato Grosso, an important state for Brazilian agribusiness, and the country's main port, the Port of Santos, is more than 1,600 km. A truck trip between the two cities can take more than 20 hours.
This expressive delay is mainly due to the conditions of the highways, which are often problematic, with constant curves and congested traffic. The same journey on a railroad reduces the time taken, as there would be no traffic on the road and the route would be more uniform.
Another important comparison made by the Institute is in relation to the transport capacity of the two modes. A train, with 134 wagons, has the same capacity to transport 500 ore carts. In other words, of course, maintenance, freight and fuel costs are much higher in the road sector.
These numbers point to a major advantage for the railroad sector and the expansion of agribusiness is linked to the growth of railroad lines. As long as there are no major investments in the restructuring of scrapped railroads and in the creation of new lines to meet this demand, agribusiness and consequently Brazil will continue to suffer.
Conclusion
We can see throughout the article that the expansion of agribusiness is linked to the strengthening of the rail transport sector. The costs spent on the road sector, which predominates in the transportation of agribusiness inputs, are quite high, which hinders the flow of cargo from this financial activity, which is so important for the country's economy.
FONTES: https://pordentrodoagro.com.br/regioes-agricolas-brasil/
https://brasilescola.uol.com.br/geografia/agronegocio.htm
https://www.cepea.esalq.usp.br/br/pib-do-agronegocio-brasileiro.aspx
